Repositioning the GRM Identity Transitioning into a truly global - - PowerPoint PPT Presentation

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2018 Presentation

Repositioning the GRM Identity

Transitioning into a truly global brand

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Moving towards the next phase of growth…

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The GRM Brand today…

• A leading exporter of rice to the Gulf region, with a majority of exports concentrated in

this region

• Exporting high quality traditional basmati varieties of rice to USA, UK and other European

countries

• Launched our own brands during FY2018 which are sold at large retailers like ASDA

(Walmart UK) ,T.J. Morris (UK),Albert Heign (Holland), Metro (Poland)

• Favourable regulatory changes and an improved operating environment in the industry have

provided a boost to players with strong market positioning and balance sheet like GRM

• Less than 10% of Revenues come fromValue Added Products currently

…Repositioning the GRM Brand

• Diversifying from traditional basmati rice offerings to

high margin own brands, specialized and value added products

• Targeting value added and ready to eat health products

in Europe and the US where there is significant demand for such products

• Focusing on supplying specialized / rare rice varieties

and health oriented ready to eat products with signature recipes

Redefined Value Proposition Integrated Business Model Niche Product Market Increasing Market Traction Enhanced R&D Capabilities

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Table of Contents

1 4 2 3

Business Overview & Strategy Industry Overview Operational Highlights Financial Performance 4 - 13 14 - 15 16 - 17 18 - 23

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Business Overview & Strategy

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Stringent proactive quality control procedures in place in accordance with International requirements Revenues of INR 9,442 mn in FY2018, an increase of 60% YoY, Net Profit of INR 119 mn, growth of 112% YoY A variety of rice offerings catering to a mix of consumer preferences Basmati, Specialised Products and Value Added Products Focused on high quality value added offerings such as branded rice varieties, branded basmati, organic rice products and ready-to-eat Around 90% of our Revenues are generated from exports to the Middle East; we are also focused on exports to US & UK Over 40 years in the Rice business with a legacy of supplying products of the highest quality

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GRM Overseas: At a Glance

“GRM has always believed in delivering the best. We are constantly focused on raising the standards…” A Wealth of Experience Export Oriented Global Standards Moving up the Value Chain Diversified Basket

• f Rice Products

Robust Financial Performance

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• To become one of India’s

distinguished suppliers of :

• High

grade branded basmati rice for western markets

• Quinoa, rice based and
• ther organic ready to

eat health products

• To successfully

launch our

• wn brand of ready to eat

health products in European markets and achieve positive synergies within next 18 months

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Strategic Approach

Focused on building our brand strength and adding value through product differentiation

Our Targets

Diversification of export mix Improvement in realisations through branding and differentiation efforts Expansion in market reach through a targeted marketing approach Premiumisation of our product portfolio

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Strategic Roadmap to Business Transformation

Focus on Value Enhancement Products

• Increase sales of specialised rice varieties like red rice and black rice (high margin products) as well as

indigenous varieties of Indian Folk Rice from Bihar,West Bengal, etc.

• Focus on Value Added products such as ready to eat products, organic products, Quinoa and exotic

seeds, etc. which are popular in advanced health food markets like US and Europe

Proactive Branding & Marketing

• Intensify marketing for own brands of basmati rice and the newer range of high margin value added

products

• Gaining traction in the western markets through our Sales offices located in the UK and US

Focus on R&D

• In house R&D team with prior experience in UK and US regions
• Focused on developing unique ready to eat rice recipes and health foods that appeal to the

International markets

• Focused on reinventing our product basket in line with market trends

Premiumisation of Product Portfolio

• Increase branded / own labels of rice; currently about 90% of the rice exported is private label
• Targeting Europe and US markets for premium products compared to the Middle East, Iran, etc. which

are highly price sensitive

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Product Portfolio

Market Segment Product Offerings Key Customers Basmati Specialised Value Added Strategically moving towards more value add products Red Rice, Black Rice, Smoked Rice, Folk rice varieties Organic Rice, Flax and Quinoa Seeds Ready to eat health products and Retorts

Targeting speciality stores across Europe. Increasing customer preferences for health food products in European markets.

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Recent Launches

Strategically moving towards more value add products

• Objective: To bring natural foods grown locally by farmers who do not use chemicals to affect the

product yield

• Target Market: The fast growing health conscious population in particularly Europe / USA / Australia

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Products & By-products

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Integrated Operations

Rice Husk Bran Wastage 5%

Basic Operations Integrated Operations

Head Rice Broken Rice

Internally used as a fuel for Boiler

Bran Oil Broken rice contributes 10% of

• ur Revenues

Enhancing value and minimising waste through integrated operations

Leveraging our

• perational

capabilities through effective utilisation

• f by-products

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Infrastructure and Capabilities

• Integrated and efficient procurement processes due to:
• Strong and long standing relationships with farming communities
• Proximity to key rice cultivation zones
• State-of-the-art factory equipped with three milling plants, each with a capacity of 20

tons per hour with shipping capacities located at Mundhra port

• Labs are well-equipped with machinery of international caliber and include moisture

meters, lab de-huskers, electronic Vernier Calipers, precision electronic weighing scales, paddy separator and lab-polishers

• Equipped with the comprehensive systems that ensure ongoing fumigation, maximum

production from ground, optimal moisture & humidity and protection from all forms of infestation

Huskers Milling Plant

One stop shop: Centralized production facility for all the operational requirements

30 containers of 23 Tons each

Production and Shipping capacity per day

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Focus on Governance, Automation and R&D

Thinking bigger is the first step to exponential growth…

Focus on increased objectivity in management decision making and engagements with external agencies, across the

• rganisation

Effective Governance

Working towards automated and better integrated reporting systems to further increase transparency

Customised ERP Systems

R&D Team in Europe to shape the value added product portfolio and ready to eat recipes for the targeted western markets

Focused R&D Capabilities Growth and expansion through dynamic business strategies Profitability and margin expansion High corporate governance standards Partner with industry leading firms across all aspects of the business

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Industry Accreditations & Recognitions

GMP Certificate HAACP Certificate ISO - 22000 Certificate BRC Certificate

Compliant with the highest International Standards

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Industry Overview

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Industry Overview

3,757 3,702 4,046 3,985 2,906 7,133 8,274 6,465 6,771 6,335 2014 2015 2016 2017 Apr - Dec 2017 Basmati Rice Non-Basmati Rice

Indian Export Volumes – MT ‘000

293 276 227 215 188 177 204 155 169 168 2014 2015 2016 2017 Apr - Dec 2017 Basmati Rice Non-Basmati Rice

Indian Export Value – INR billion T

• p 5 Destinations for Export during April – December 2017

Basmati Rice % Iran 23.0 Saudi Arabia 15.7 Iraq 11.3 UAE 9.4 UK 5.3 Kuwait 4.1 Non-Basmati Rice % Bangladesh 19.5 Benin 10.2 Senegal 7.0 Sri Lanka 5.9 Nepal 5.6 Guinea 4.9

Source: APEDA

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Operational Highlights

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Operational Highlights

• Export volumes have progressively increased over the last five years at a CAGR of 23.6%
• The increase in sales volumes is attributable to:

▪ Expansion of our client base in existing locations such as the Middle East ▪ Growth of the business in US and UK due to targeted sales efforts

• The increase in realisations are attributable to:

▪ Expansion of our client base across geographies ▪ Gradual increase of own brands and value added products in the product mix

641.9 859.4 760.1 1,145.3 1,487.5 2014 2015 2016 2017 2018

Export Volumes (Rice) (000’ MT)

CAGR 23.4% 6,469 6,419 4,586 5,086 6,148 2014 2015 2016 2017 2018

Realisation Per Unit (Rs./MT)

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Financial Performance

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FY2018 Performance Highlights

Building momentum for the next phase of our growth story…

Strong growth in revenues and profitability…

Commenting on the results and performance, Mr. Rohit Garg, MD, and Mr. Atul Garg, Joint MD said: “During FY2018, GRM continued to grow its market share in the gulf region with high quality products and strong customer relationships. As a part

• f our growth strategy, we have expanded exports to 25 new countries and have made noteworthy progress in the UK market where we are now

selling our own brands in large retail stores like ASDA (Walmart UK). We are very pleased with the strong financial performance achieved during the year with revenue growth of 60% and net profit growth of 112% y-

• -y. The underlying growth was primarily driven by a combination of both, higher volumes and increased price realizations.

Going forward, GRM will focus on diversifying from traditional basmati rice offerings to high margin own brands, specialized and value-added products, and adding value through product differentiation. Taking the momentum forward with a clear strategy in mind, GRM is poised to enter into a new era of growth and to create maximum value for all our stakeholders.”

5,912 9,442 FY2017 FY2018

Total Revenue (INR Mn.)

202 350 FY2017 FY2018

EBITDA (INR Mn.)

56 119 FY2017 FY2018

PAT (INR Mn.)

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FY2018 Profit & Loss

(INR Million) FY2018 FY2017 Y-o-Y % Total Income from Operations 9,442 5,912 59.7% EBITDA 350 202 73.1% EBITDA Margin 3.7% 3.4% 122.5% EBIT 330 183 80.7% EBIT Margin 3.5% 3.1% 135.1% PBT 183 85 116.0% PBT Margin 1.9% 1.4% 194.2% PAT 119 56 112.2% PAT Margin 1.3% 0.9% 187.9% Basic EPS 32.13 15.14 112.2%

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Key Balance Sheet Items

(INR Million) FY2018 FY2017 Short Term Debt 2,335 1,496 Long Term Debt 583 484 Total Debt 2,918 1,980 Cash and Cash Equivalents 11 18 Net Debt 2,907 1,963 Total Shareholder Equity 518 421 Net Debt to Equity (x) 5.6x 4.7x Interest Coverage Ratio (x) 2.2x 1.9x

299 344 365 421 518 2014 2015 2016 2017 2018

T

• tal Shareholders' Funds (INR Mn.)

16.2% 14.2% 5.8% 14.2% 25.3% 2014 2015 2016 2017 2018

Return on Equity (ROE %)

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Annual Financial Trends

4,217 5,684 3,557 5,912 9,442 2014 2015 2016 2017 2018

Revenue (INR Mn.)

158 241 142 202 350 2014 2015 2016 2017 2018

EBITDA (INR Mn.)

48 46 21 56 119 2014 2015 2016 2017 2018

PAT (INR Mn.)

13.08 12.38 5.56 15.14 32.13 2014 2015 2016 2017 2018

Basic EPS (INR)

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Key Ratios

Strong improvement in return ratios

Continuous focus on enhancing shareholder’s return... During the year, management continued its focus on penetrating new markets with value added products

2.0 1.6 1.3 1.9 2.2 2014 2015 2016 2017 2018

Interest Coverage (x)

16.2% 14.2% 5.8% 13.3% 25.3% 2014 2015 2016 2017 2018

ROE %

9.0% 12.5% 7.2% 6.0% 11.6% 2014 2015 2016 2017 2018

ROCE %

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Contact Information

This presentation contains statements that are “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to GRM Overseas’ future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number

• f risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. GRM Overseas undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.

For further information, please contact: Atul Garg, Director GRM Overseas +91 180 265 2476 atul@grmrice.com Ravi Gothwal / Samantha Francis Churchgate Partners +91 22 6169 5988 grm@churchgatepartners.com

www.grmrice.com Gohana Road, Panipat, Haryana, India. Phone : +91-180-2652476 / 2652524 Fax : +91-180-2653673 Web: www.grmoverseas.com